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Enron Mail |
Transport Options - In response to our recent FERC filing, a technical
conference has been scheduled in Washington D.C. for January 9, 2001. Fuel Hedge - With gas prices running at record highs, we hedged 5,000 MMBtu/d of fuel for calendar 2002 at $4.50, then unwound it the following day as the market dipped allowing us to book a small gain in excess of $100,000. We expect prices to jump again next week with the oncoming cold snap and we'll likely reset the hedge at higher numbers. PNM - TW's response to PNM's request for transport proposal went out this week. They are paying max rates on an East to East contract and indicated to us they feel the rates are not currently supported by the market.; TW however disagrees. Our response to them leaves the current rate structure in place but has two additional tiers of volumetric incentive pricing. As their volume increases, their rates go down. In addition, we added a seasonal IT rate to the proposal that helps them meet any swing gas demand requirements. Albuquerque Lateral - ENA is meeting with IPP plant owners in the Albuquerque region who would like to see alternative sources of gas supply besides the local utility. If the operators expand the plant from a peaking unit to a combined-cycle unit, there is potentially enough load to justify a new delivery lateral off TW's mainline. Part of the deal structure may include a volume incentive rate as throughput increases in the lateral. Next step for TW is to build a rate matrix under several different operating scenarios. Responses are due to ENA by Friday 12/15. Black Mesa Project - We continue to evaluate the potential of converting the Black Mesa coal slurry line owned by Northern Border into gas service. The big advantage for TW is it will increase our capacity to bring San Juan gas to the California border but there is also a positive environmental play for Black Mesa and coal slurry along with Mohave and coal pollution affecting the Grand Canyon. This whole project is contingent on several factors, not the least of which is working with Mohave Generating Station majority owner AES (70%) to convert the plant to gas and working with the Navajo who could lose a large export market for their coal. ENA has agreed to approach AES on this project in the near future once their negotiations on the Las Vegas power plant are complete. Legal is checking the existing ROW to see if there are limitations on the pipe usage. Burlington Claim - We are assembling the volume and revenue impact figures of the November train derailment for submission to Burlington's claims adjusters. This will be combined with the total operations costs.
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